Question
Which of the following statements if correct? A. The repo market is a highly liquid and flexible source of funds for DIs needing to increase
Which of the following statements if correct?
A. The repo market is a highly liquid and flexible source of funds for DIs needing to increase their liabilities and to offset deposit withdrawals.
B. DIs are able to lend a greater percentage of their deposits than before as a result of an increase in the reserve requirement ratio.
C. For reserve calculation purposes, the period that begins on a Tuesday and ends on a Monday 14 days later is known as the reserve maintenance period.
D. The following rankings of liabilities is correct if they are ranked by withdrawal risk from riskiest to least risky: certificates of deposit; money market demand accounts; Demand deposits.
E. The minimum daily average reserve requirement is computed by multiplying the reserve ratio by the daily average opening deposit balance.
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